Volume & Pricing

Global cement capacity is forecast to edge up by almost one percent per year on average between 2018 and 2023, according to CW Research’s 2H2018 update of the Global Cement Volume Forecast Report.

The slim increase reflects a context of capacity rationalization efforts in China, which are offsetting additional capacity elsewhere at the global level. Usually accounting for half of the world’s total, Chinese cement capacity will slow down and contract at an annual average of 3.0 percent between 2018 and 2023, therefore contributing to offset the increase of almost four percent per year between 2018 and 2023 projected for global ex-China.

“The cement sector in China is already experiencing an improvement, with peak season measures designed to reduce pollution – such as shutting down industrial plants, which in turn leads to a tightening of supply. We believe that this will help the Chinese cement sector to operate at healthier rates and add to the positive feeling amongst investors”, notes Raluca Cercel CW Group’s Associate.

In 2018, Asia ex-China will be the leading region in terms of capacity additions, with India contributing the most to the expansionary trend. Indian cement manufacturers have already announced the construction of production lines with the capacity to produce 60 million tons of cement per annum for this year.

In North America, only Canada is expected to expand its production capacity by adding roughly two million tons of annual capacity in 2018-2023.

Turkey will be taking the lead in the Eastern Europe and CIS region, adding a total of 14 million tons of capacity by 2023 – almost half of all capacity additions forecast for the region in the next five years. Nevertheless, the country is currently facing a series of economic challenges – from the weakening of the lira to the double-digit inflation – that are bound to take a toll on the cement sector.

Most of the African markets are expecting a strong growth in cement demand, which will translate into higher production levels and higher cement capacity – a trend that will be more pronounced in Egypt.

Middle Eastern markets are projected to add over 50 million tons of capacity between 2018 and 2023. Currently, Iran is the leader in cement production capacity, accounting for 37 percent of the regional total. However, in the wake of the ISIS conflict, Iraq alone is adding four million tons per annum in capacity until the end of 2018. This bid to make the Iraqi cement market self-sufficient will likely contribute to a substantial increase in the Middle Eastern capacity figures.